Abstract:

Interpretation of payout policy has formed defiance for scholar of corporate finance, since emergence of paper of lintner in 1956 and thereafter the paper of Black in 1976, the issue still even after decades subject for examining.  Black stated his famous statement “The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that just don’t fit together”. In this vein, this study shed light on the comparatively new issue in the realm of dividend policy which is disappearance of dividends. This phenomenon is elaborated from the perspective of the most fundamental scholarly works. The extensive review and analysis revealed several reasons behind such phenomenon, among of them are the catering theory, risk aversion and life cycle hypothesis.